AFTERNOON REPORT
(4.30pm AEST)

Local stocks rebounded today, despite an impasse over the US debt crisis. US President Barack Obama today urged the Republicans to come to a compromise over the deadlock, which needs to be finalised before August 2nd or the US government will default on its debt repayments for the first time in history. Overnight, US and European markets fell, however investors bought back into local stocks which were heavily oversold yesterday. The All Ordinaries Index (XAO) rose 42.5pts or 0.9pct to 4646.3 while the S&P/ASX 200 Index (XJO) rose 42.9pts or 1pct to 4573.3.

Financial stocks clawed back a lot of yesterday's losses, with the sector adding 1.2pct. Westpac (WBC) underperformed the big four, after a technical glitch in its computer system caused delays to some of its customers payments overnight. WBC shares added 0.5pct to $21.36 while the Commonwealth Bank (CBA) was up 1.4pct to $50.22. The ANZ (ANZ) firmed by 1.1pct to $21.55 and the National Australia Bank (NAB) was up 0.8pct to $24.82. Shares in Macquarie Group (MQG) firmed by 1.5pct to $29.50.

Higher oil prices helped drive a surge in Oil Search´s (OSH) June quarter revenue, as its Exxon Mobil-led joint venture in Papua New Guinea progressed towards first production. OSH shares added 2.7pct today while the overall energy sector firmed by 6.9pct.

Whitehaven Coal (WHC) today announced it lifted coal production by 47pct in the June quarter. Total coal sales jumped 82pct. WHC shares gained 0.5pct to $6.58. Index leader BHP Billiton (BHP) firmed by 1.1pct to $43.52 despite general weakness on the London Metals Exchange overnight.

Wholesale distributor Alesco (ALS) is back in the black, posting FY net profit of $13.6 million, following a loss of $124.3 million last year. ALS shares today rose 5.6pct to $2.84.

The Reserve Bank Governor Glenn Stevens today delivered a speech titled "The Cautious Consumer". The Governor indicated the decision by consumers to save more and spend less is more choice rather than necessity, and flagged that while weakness in spending won't last forever, it is unlikely to return to the "good old days for consumption growth of the 1995 2005 period". The Governor also stressed that the rise in the terms of trade has probably come to an end and it will have to be productivity growth which drives income and spending growth higher.

Retail stocks were mixed today, although Premier Investments (PMV) clawed back yesterday's losses, rising 5.6pct to $5.41.

Asian stock markets were mostly higher today. Strong earnings results lifted the Tokyo market, with Canon shares stronger after the company lifted its full-year outlook. Chinese airline stocks continued to outperform on growing expectations more passengers will switch to airplane travel after Saturday´s train crash in Zhejiang Province.

The Australian dollar ended the day's trade higher against the greenback, as investors sought to dump the US currency over the ongoing debt crisis. The Aussie rose from levels of US108.3c to close the day's trade at US109.22c. It was also buying €0.6686 and £75.4c.

On the market overall, a total of 1.27 billion shares were traded, worth $4.86 billion. 651 were up, 427 were down and 360 were unchanged.

At 4.15pm AEST on the ASX24, the futures contract was at 4544, up 31pts.

Ahead tonight, the May S&P Case-Shiller home price index is scheduled for release, along with new home sales for the month of June and the July consumer confidence report.

Among the companies releasing earnings are: 3M, Ford, shipping giant UPS and online retailer Amazon.

(From Juliette Saly, CommSec Market Analyst)